Nike is an American-owned manufacturer of sports clothing, and is best-known for its sports footwear. The company has relatively few physical assets: its manufacturing is subcontracted to 140 factories worldwide, and it has only its office equipment, furniture, and some stocks in transit between the factories and the distributors. 

Essentially, Nike is managing a brand, and what’s more is managing it in a highly competitive and rapidly shifting marketplace. For that reason, the company has to ensure that it stays at the top of its game in understanding its customers and consumers.

In order to stay ahead, Nike uses a psychographic segmentation policy. This means that consumers are divided up according to their attitudes, beliefs and underlying motivations. For most athletes other sports footwear such as Adidas or Puma would do the job just as well, but non-athletes are a different story: they only wear the shoes as fashion items so the company is in the business of selling an image. 

Consequently, Nike uses sponsorship a great deal in order to promote its products and appeal to a specific market segment. Top athletes are paid to use Nike products, and consequently the image and popularity of the athlete is passed to the brand. The problem for Nike is to ensure that the right athletes are chosen, and that they are not involved subsequently in some scandal (for example using performance-enhancing drugs). 

In an interview for the Harvard Business Review, the co-founder of Nike, Phil Knight, explained how the company’s approach to marketing research had shifted and developed. At first, Knight said, almost all the company’s employees were runners or other types of athlete, so in effect the company and the consumer were one and the same.........

Case study questions.

1. Why does Nike talk to retailers? 

2. How might a focus group on a new shoe help Nike to plan its market? 

3. What is the role of observational research in Nike’s overall research plan? 

4. Why does Nike use qualitative methods rather than quantitative ones? 

5. Why might the company not have felt the need to carry out research in its early years?